May 25, 2023 - Economy & Business

Gas is cheaper than last summer, but above pre-pandemic prices

Data: Energy Information Administration, GasBuddy; Chart: Kavya Beheraj/Axios

Gas prices are rising slightly compared to previous months, but they're still well below last year's levels as we head into Memorial Day weekend and the travel-heavy summer season.

  • Nationally, the average price per gallon of regular gasoline has been $3.53 throughout May 2023, compared to $4.60 a year ago.

The big picture: Gas prices set record all-time highs last year amid a broader inflation crisis, and driven in part by Russia's invasion of Ukraine, which destabilized global energy markets.

  • Prices are still well above pre- and mid-pandemic levels.

Zoom in: At the state level, gas prices are highest in California, Hawaii and Arizona, while they're lowest in Mississippi, Texas and Louisiana.

  • While gas prices fluctuate from state to state, they tend to follow the same up-and-down trends nationwide.

What they're saying: "Despite mild weather and a less volatile economic forecast, drivers are not hitting the road and raising gasoline demand to traditional seasonal levels," said AAA spokesperson Andrew Gross in a statement.

Yes, but: AAA and others are predicting near-record travel this summer, which could spike demand — and lead to higher prices — in the warmer months.

  • "It's possible this is merely the lull before Memorial Day, but it could be a trend that lingers into summer," Gross said.

Between the lines: The Environmental Protection Agency issued an emergency waiver last month allowing the summertime sale of gasoline blended with 15% ethanol in a bid to suppress prices.

  • So-called E15 gas is typically avoided in summer due to smog concerns.

The bottom line: People love cheap(er) gas — but higher prices can have the long-term benefit of driving consumers to more efficient and cleaner hybrid and electric cars.

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